PSA Peugeot-Citroën has revealed some of the early successes that it has had implementing the labour contract it signed with unions a little over seven months ago, although reports also suggest that the company is targeting further early retirements, this time at a site in Rennes (France).
IHS Automotive perspective | |
Significance | PSA Peugeot-Citroën has revealed some of the early successes that it has had implementing the labour contract it signed with unions a little over seven months ago. |
Implications | PSA has revealed further tweaks to schemes to support workers in roles which are potentially under threat in future. |
Outlook | Even with these initiatives in place, PSA is still undertaking steps to improve its efficiency in France, particularly within its manufacturing footprint. |
PSA Peugeot-Citroën has revealed some of the early successes that it has had implementing the New Social Contract that it signed with four out of its six unions a little over seven months ago. In a statement, the automaker has released a report on the Employment chapter of this agreement, in which it has said that it has shown "that it is possible to address both business and labour challenges during a time of economic crisis," and without the need for collective layoffs.
As part of the deal, the company said that so far 890 employees have signed on for a voluntary "end-of-career" transition programme out of 950 that had been estimated. However, it added that a further 565 requests are currently being processed. PSA will also recruit 1,120 young people as part of a work-study arrangement during 2014, against the 2,000 it plans to take on under this initiative during the next two years. Among those taken on this year, 800 will be under apprenticeship contracts, 190 are set to be under skills-qualification contracts, 110 under the VIE co-op placement scheme and 20 under CIFRE doctoral student contracts. In addition, 650 internal mobility assignments have been initiated or completed under Human Resources Planning and Development (GPEC), against a forecast of 1,250. Under the Jobs and Skills Alignment System (DAEC) which meets a need for internal mobility and training for sensitive professions - those which are under threat from changes in the industry - within the company, around 225 courses have been initiated since January, with 524 training arrangements continuing to be active. Efforts to improve the levels of professional training to around 20 hours (up 50% from 2013) have also continued, and within the first five months, the company noted that 440,000 hours of training had been provided, although this represented just a third of the annual target.
Coinciding with the announcement, the company also revealed that it has now signed an agreement with all six of its unions on enhancing the measures under its DAEC scheme. The company said that while 60% of Automotive Division employees are in adequately staffed jobs, 17% are in understaffed positions (jobs for which opportunities exist) and 23% are in sensitive positions. To ensure all positions are adequately staffed the company will enhance the initiative and make adjustments to its GPEC programme. Internal transfers will be encouraged while new incentive measures will be deployed to encourage outplacements, including six months' salary in addition to severance pay under a collective bargaining agreement. There will also be the opportunity for some in sensitive or adequately staffed positions to have their work contracts suspended for 24 months on an outplacement with another company which gives them an opportunity to return if the project is not completed. The company also noted that Territorial Career Mobility and Transition Platforms that were announced in May are currently being deployed in the five regions where PSA is based: Alsace, Brittany, Franche-Comté, Ile-de-France and Nord-Pas-de-Calais. These are responsible for carrying out initiatives to retrain transitioning employees and prepare young people for future jobs.
Nevertheless, despite these efforts, a media report has suggested that the company is seeking further staff to accept early retirement at its site in Rennes (France). Pierre Contesse, a FO union official told Bloomberg News that the company will allow staff who are at least 55 years old to stop working but still receive 75% of their gross salary until they turn 60. He added that the union has agreed to the plan which is aimed at encouraging the departure of about 500 employees. The offer also includes the opportunity to continue working elsewhere. A spokesperson for PSA denied to comment on personnel issues at the site.
Outlook and implications
The New Social Contract was put forward by the automaker to unions during a series of negotiations which took place during 2013 and was finally signed at the end of October 2013 (see France: 25 October 2014: PSA reaches labour agreement with French unions). The main aim of the deal for PSA was to manage its costs and improve efficiency at its domestic operations, with a target of a EUR125 million (USD170.2 million) for savings having been set. However, it has also been designed so as not to require very few, if any, redundancies and instead has intended to focus on early retirements and the flexibility that this deal now offers. It certainly seems that this has been initially successful, although some tweaks appear to be required to support those in positions which the automaker suggests may not be around in the long term.
Nevertheless, the company still has some work to do to realign its production footprint and this continues to take place. It has already undertaken the closure of its Aulnay-sous-Bois facility on the outskirts of Paris (France), while it was announced last week that its Mulhouse (France) site will eventually move to single line running as part of investment which will eventually bring two D-segment model variants to the factory (see France: 12 June 2014: PSA announces EUR300-mil. investment in Mulhouse site, confirms new region-based Executive Committee). As a result of this, questions have been raised with regards the future scale of its Rennes site. Although a new multi-purpose vehicle (MPV) has been earmarked for the site (see France: 29 November 2013: PSA announces plans to invest EUR90 mil. at Rennes site), it predominantly builds PSA's D-segment offerings, the Peugeot 508 and Citroën C5. Although the latest decision is intended to address the current situation at the site where reduced levels of production are said to mean that around 700 staff of the 4,800 at the site are furloughed. It remains to be seen whether PSA will need to do something further in the future to address its headcount at the site, or whether the new MPV and already anticipated models can carry these staffing levels in future.